Direct Marketing ROI: Return On Intelligence!

Guest Blogger, Kevin Hillstrom: Build and Reap the Benefits of Social Media Databases

Jim’s note: Kevin Hillstrom and I write weekly columns for All About ROI (formerly Catalog Success) Magazine. I really enjoyed his article (and perspective) this week about building social media databases. Definitely something to implement! Enjoy…

It’s really hard these days to find a marketing discussion that doesn’t include the phrase “social media.” But it’s also really hard to find a case study of someone who created a social media database and then measured return on investment based on the data in that database.

A social media database houses information about social media customer behavior. Take Twitter, for example: Every time a new user decides to follow your Twitter presence, you enter that user in your database. You enter the user name, date the user began to follow you and any biographical information about the user.

Every time a Twitter user has something to say about your brand — positive or negative — you enter the information into your social media database. Did the user retweet one of your articles? If so, capture the user name, date it happened and action (retweet). Did the user link to one of your web pages? Capture that information with the link.

Some people will criticize your brand. Record the user name, and categorize the nature of the criticism. Did the user say something positive? Record the user name, and categorize the compliment, recording the date this activity happened.

Record every outbound communication, too. If you speak with a Twitter user, record the fact that you had a conversation.

Eventually, you’ll have a robust database of every interaction you can identify. Actively search for instances where someone says something about your brand name, identifying hashtags that are related to your brand.

Now you’re in business! Mine your social media database, identifying users who start conversations. Where possible, link these users to your customer database so you can begin to correlate purchase activity and website visitation habits with positive or negative social media sentiments.

Some people would say that this is hard work, that they don’t have the resources to do this kind of work. I’d pick five individuals in my call center and have them enter this information into the social media database — each individual spends an hour or two each week entering data based on the parameters listed above.

Once the data is captured, it becomes much easier to measure ROI. For some, ROI is a function of sales and profit generated. For others, the acquisition of new customers becomes important. Or maybe success is measured by the amount of positive buzz or the mitigation of negative sentiment. A social media database allows you to measure all of these aspects of your social media activities.

Eventually, you’re going to have to prove that social media has a positive ROI, that it isn’t simply a way to connect with active and potential customers. Why not begin capturing the data today, so you can demonstrate a positive ROI in the future?